Annals of the University of Oradea: Economic Science (Dec 2011)
RENEWABLE ENERGY, A KEY TO INTEGRATING COMPETITIVE POLICIES WITH ADVANCED ENVIRONMENT PROTECTION STRATEGIES
Abstract
Development of competitive policies and improvement of environment protection strategies are two basic trends of the development of the European Unique Market. Energy, also known as 'industry bread', is basic product and strategic resource, where energy industry plays an obvious role in the economic and social development of any community. Traditional energy production is marred by three major drawbacks: it generates negative externalities by polluting; it is totally in the hands of the producers; hence, prices rise at their will, of fossil fuels such as oil and gas. Present study focuses on electric energy industry, yet bearing over the whole length of the chain producer-to-end-consumer, thus revealed as particularly complex. The question is do alternative energy sources meet the prerequisite of market being competitive meanwhile environment protection being highly observed. We identify limits in point, of the energy market; effects of market liberalization; entry barriers; interchangeability level of energy sources; active forces on the energy market. Competitive rivalry has been expressed as per market micro-economic analysis, based on Michael Porter's 5-forces model. It will thus be noticed that, morphologically, competition evolution depends firstly on the market type. For the time being, the consumer on the energy market stays captive, for various reasons such as: legislation; limits of energy transfer infrastructure; scarcity of resources; resources availability imbalance; no integrative strategy available, of renewable energy resources usage. Energy availability is vital for human society to function. Comparative advantages of renewable energy resources are twofold, as manifested: in terms of economics, i.e. improving competition by substitute products entered at the same time as new producers enter market; and in terms of ecology, by reducing CO2 emissions. As to energy production technology and transfer, the complementary nature will be noticed, of renewable energy resources, such nature manifesting itself as a 6th force, the force of complementary products apt to stimulate low competition on the energy market.
